Red Kite Fund Says Withdrawals Are `Insignificant'

Date: Friday, February 16, 2007
Author: Saijel Kishan, Bloomberg.com

(Bloomberg) -- RK Capital Management LLP said requests from investors to withdraw cash from its hedge fund, Red Kite Metals Ltd., were ``insignificant'' following losses last month.

``We are pleased to report that our investor base, including all of our major investors, has given us strong support and encouragement for the future,'' Red Kite, run out of London and New York, said in a statement received today. Request to redeem investments on March 31 have been ``insignificant,'' the fund said.

Investors agreed on Feb. 8 to give Red Kite 45 days notice before withdrawing cash from the fund, instead of the 15 days that was previously required. Investors, who can withdraw their money on a quarterly basis, must have given notice by yesterday to redeem their investments at the end of this quarter.

The Red Kite fund, which gained 188 percent last year, lost about 30 percent last month, according to investors, as copper prices declined. RK Capital, which manages more than $1 billion, was co-founded by Michael Farmer, 62, who once jointly ran MG Plc, formerly the world's largest copper-trading company.

Red Kite said in a Jan. 31 letter to investors that it needed to extend the notice period to efficiently manage the fund. Hedge funds are private pools of capital that allow managers to participate substantially in the gains of the money invested.

Copper prices have gained 8.4 percent in the past two weeks after falling to their lowest since March.

To contact the reporter on this story: Saijel Kishan in London at skishan@bloomberg.net .